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Quoted By: >>1172949
https://www.npr.org/2023/05/31/1176769042/russia-economy-brain-drain-oil-prices-flee-ukraine-invasion
Even before the invasion, Russia was experiencing a labor shortage: Businesses and factories complained that they couldn't find the workers they needed.
"Now it's a full-blown demographic crisis," says Oleg Itskhoki, an economist at the University of California, Los Angeles.
Itskhoki says this poses a huge problem for Russia's economy: Without workers, many companies and businesses are having to scale back or even shut down entirely.
But the labor shortage is not the only problem facing the Russian economy.
In 2022, Russia's economy held strong in spite of harsh sanctions, earning the nickname "fortress Russia." A lot of this economic toughness came from oil prices. The invasion of Ukraine caused a global panic that pushed the price of oil way up.
Russia was able to sell its oil to China and India, among others. And a lot of the sanctions against selling oil and natural gas to Europe didn't kick in until the end of last year.
But 2023 is a very different year for the Russian economy. European sanctions have kicked in, so oil revenues are way down and now the war is costing Russia hundreds of millions of dollars a day.
"2023 is the year of difficult choices for Russia," says Itskhoki.
He says right now Russia needs money, which means President Vladimir Putin will have to either raise taxes (most likely on businesses) or force people to buy war bonds — or both.
That could erode support for the war, which Putin desperately needs.
Even before the invasion, Russia was experiencing a labor shortage: Businesses and factories complained that they couldn't find the workers they needed.
"Now it's a full-blown demographic crisis," says Oleg Itskhoki, an economist at the University of California, Los Angeles.
Itskhoki says this poses a huge problem for Russia's economy: Without workers, many companies and businesses are having to scale back or even shut down entirely.
But the labor shortage is not the only problem facing the Russian economy.
In 2022, Russia's economy held strong in spite of harsh sanctions, earning the nickname "fortress Russia." A lot of this economic toughness came from oil prices. The invasion of Ukraine caused a global panic that pushed the price of oil way up.
Russia was able to sell its oil to China and India, among others. And a lot of the sanctions against selling oil and natural gas to Europe didn't kick in until the end of last year.
But 2023 is a very different year for the Russian economy. European sanctions have kicked in, so oil revenues are way down and now the war is costing Russia hundreds of millions of dollars a day.
"2023 is the year of difficult choices for Russia," says Itskhoki.
He says right now Russia needs money, which means President Vladimir Putin will have to either raise taxes (most likely on businesses) or force people to buy war bonds — or both.
That could erode support for the war, which Putin desperately needs.
